Measuring Syngas Limited’s (ASX:SYS) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SYS’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Syngas
Were SYS’s earnings stronger than its past performances and the industry?
I look at the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to assess various companies on a similar basis, using new information. Syngas’s most recent earnings -A$0.4M, which, relative to the prior year’s level, has become less negative. Since these figures are relatively myopic, I’ve calculated an annualized five-year value for SYS’s earnings, which stands at -A$3.0M. This means although net income is negative, it has become less negative over the years.
Additionally, we can examine Syngas’s loss by looking at what’s going on in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last few years has been negative at -52.99%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the Australian oil, gas and consumable fuels industry has been ramping up average earnings growth of 57.50% in the prior year, and a more muted 5.14% over the past five years. This means whatever tailwind the industry is deriving benefit from, Syngas has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues Syngas may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Syngas to get a more holistic view of the stock by looking at:
1. Financial Health: Is SYS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.